Accidental damage protection is a product sold by many manufacturers to accompany their product. The concept is not new and many consumers will opt for such a coverage product when investing in expensive products such as electronics. Computers and peripherals are the most commonly covered items on this type of plan. These plans are offered to supplement the normal warranty that would accompany the product. Accordingly, they are not free and careful consideration should be given to the value of the plan vs. the replacement value of the product.
This type of coverage will generally pay for repair costs or sometimes the full replacement of an item damaged by accident. Plans vary as to the types of losses that are covered but in most cases, the covered causes are broader than what you might find in a typical homeowner’s insurance policy. In a sense, these products may duplicate some coverage provided by most homeowner’s insurance policies. Because of this, accidental damage protection often includes provisions that offer more than just cash payment for the value of the damaged item. Such provisions include free pick up and delivery, zero deductible, and full replacement cost which means no depreciation will apply to the claim.
In other cases, the plan actually excludes coverage for losses that would be covered under a typical homeowner’s insurance policy such as fire or theft. Intentional damage is always excluded, as is normal wear and tear.
Most plans will also include varying levels of technical support. Depending on the type of product, this could be a very valuable provision, particularly computers, electronics or other specialty items.
When considering such a plan, be sure to carefully review the section pertaining to off site services, as there may be coverage territories that apply. If you are not within a specified coverage territory, additional fees may apply.
Some plans are owned and operated solely by the manufacturer of the covered product and others are actually underwritten by a separate company that specializes in accidental damage plans, but offered to consumers by the manufacturer. A third option is for consumers to shop for plans on their own. Plans for consumer electronics are widely available through Internet sources. In either case it is important to review the plan to see the types of losses that are covered, conditions that apply to certain services that may be offered, as well as the applications of fees that may apply in addition to the up front cost of the coverage.